By Julie Shapiro
Condo owners at the Regatta in Battery Park City will have to wait at least another month before finding out how much their monthly payments will go up next April.
Regatta residents have been negotiating with the Battery Park City Authority over their ground rent, a monthly fee levied against all B.P.C. property owners. The Regatta’s yearly ground rent is slated to go up 25 percent, from $1.836 million to $2.295 million, starting in April. It would then stay the same for 15 years.
The increase would force Regatta residents to pay an average of just over $200 more a month. That is too steep, said Gene Glazer, president of the Regatta at S. End Ave. and W. Thames St. He wants the authority to smooth the increase over 15 years.
The authority’s board was scheduled to vote Tuesday morning on a proposal to do just that, but vice chairperson Charles Urstadt raised an objection and the board deferred the issue to its early January meeting. The proposal also would have smoothed increases at the Liberty View and Cove Club buildings, whose ground rents will go up in 2011.
“Don’t the residents need to know what the hell is going on?” asked David Cornstein, an authority board member. Forcing residents to wait until January gives them only a “very limited time” to adjust to whatever the authority decides, he said.
Speaking after the meeting, Glazer agreed.
“Certainly we would have preferred that it be voted on at this meeting,” he told Downtown Express. “Particularly in this economic environment, which everyone is looking at in the city, [Regatta residents] would like some degree of certainty about what’s going to happen. This defers knowing for another month.”
At the board meeting, chairperson James Gill mentioned Urstadt’s concern and seemed ready to move on, but Urstadt jumped in to explain. He was worried that striking a deal with the Regatta, Cove Club and Liberty View would set a precedent for dealing with the neighborhood’s 10 other buildings, which could affect the authority’s surplus. That surplus is transferred to the city each year for affordable housing.
“This could have a profound effect on the amount of money the city gets and the amount of money the city puts into low- and moderate-income housing,” Urstadt said.
Urstadt said the proposal would leave the authority short $56.1 million over 15 years, a figure that could build a lot of affordable housing.
“Are you taking money away from lower-income people and giving it to people who live in these condos?” Urstadt asked after the meeting.
Urstadt told Downtown Express any New Yorker would complain about their rent being too high, and he does not want to give anyone a break just based on political connections.
“The second most passionate relationship known to man is landlord and tenant, except in New York, where it’s the first,” Urstadt joked. “Everyone says it’s not fair. I don’t know what fair is.”
The postponed decision will give the authority more time to weigh the fairness, Urstadt said.
Urstadt, sometimes called the “father of Battery Park City,” was appointed by Gov. Nelson Rockefeller in 1968 to be the authority’s first chairperson and was reappointed to the board 10 years ago.
Urstadt, reading the authority’s report over the phone, quoted it as saying “…the authority would forgo $56.1 million in ground rent over 15 years.” But Jim Cavanaugh, the authority’s president, told Downtown Express the figure did not come from the report and he didn’t know what Urstadt was referring to. And two other people familiar with it said the city would not lose any money under the proposal. The report has not been made public.
Glazer, from the Regatta, said residents would ease into the increase slowly, but the authority would not lose any money on the deal. Condos would pay more over the 15 years under a complex formula that assumes a 6 percent interest rate, Glazer said. The only difference would be when the authority and city got the money, Glazer said.
Glazer said the Regatta, Liberty View and Cove Club residents pay more ground rent per square foot than Battery Park City’s other buildings. Each building has its own individually negotiated deal with the authority based on the developer and financial climate in which the land was leased. Many of those ground leases started out below market rate with built-in increases over time.
During the B.P.C.A. board meeting, member Robert Mueller pointed out that Battery Park City residents already pay far more than most city residents, because they pay ground rent, public space charges and the equivalent of property taxes, called PILOTs, or “payments in lieu of taxes.”
“If we don’t do something about it…they’re going to be inordinately burdened with these rents,” Mueller said. “I think that’s a good reason [to smooth the increase].”
The city does not have to approve the plan.
After the meeting Mueller told Downtown Express he was confident the board could reach an agreement on the ground rents.
“Everybody would like to do the right thing,” he said.
Urstadt, though, thought January was too soon to make a decision. If the authority needs more time, residents of the Regatta could start paying the large increase in April and then receive a rebate if the authority later modifies the agreement, he said.
Julie@DowntownExpress.com
